ARGUMENT

IN THE SUPREME COURT OF THE UNITED STATES, FEBRUARY 9, 1839, IN THE GREAT APPEAL CASE FROM THE DISTRICT OF ALABAMA.

THE record (said Mr. WEBSTER) presents this case:

The Bank of the United States is a corporation created by a law of the State of Pennsylvania. By that act the bank, among other functions, possesses that of dealing in bills of exchange. In the month of January, 1837, having funds in Mobile, this bank, through the instrumentality of its agent, Mr. Poe, purchased a bill of exchange to remit to New York. This bill, drawn at Mobile upon New York, and endorsed by Wm. D. Primrose, the defendant in this case, not having been paid either at New York or by the drawer, the Bank of the United States instituted this suit in the Circuit Court of Alabama, to recover the money due on the bill.

In the court below, it was decided that the contract by Poe in behalf of the bank was void, on two grounds;-first, because it was a contract made by the Bank of the United States, in the State of Alabama; whereas a bank incorporated by the State of Pennsylvania can do no act out of the limits of Pennsylvania; secondly, because Alabama has a bank of her own, the capital of which is owned by the State herself, which is authorized to buy and sell exchange, and from the profits of which she derives her revenue; and, the purchase of bills of exchange being a banking operation, the purchase of such bills by others, at least by any corporation, although there is no express law forbidding it, is against the policy of the State of Alabama, as it may be inferred from the provisions of the constitution of that State, and the law made in conformity thereto.

It is admitted that the parties are rightfully in court. It is admitted, also, that the defendant is a citizen of Alabama, and that all the citizens who compose the corporation of the Bank of the United States are citizens of the State of Pennsylvania, or of some other State besides Alabama. The question is, Can they, as a corporation, do any act within the State of Alabama? In other words, is there any thing in the constitution or laws of the State of Alabama which prohibits, or rightfully can prohibit, citizens of other States, or corporations created by other States, from buying and selling bills of exchange in the State of Alabama?

In his argument, yesterday, for the defendant in this case, my learned friend (Mr. Van de Graff) asked certain questions which I propose to answer.

Can this bank (said he) transfer itself into the State of Alabama? Certainly not.

Can it establish a branch in the State of Alabama, there to perform the same duties, and transact the same business, in all respects, as in the State of Pennsylvania? Certainly not.

Can it exercise in the State of Alabama any of its corporate functions? Certainly it can. For my learned friend admits its right to sue in that State, which is a right that it possesses solely by the authority of the Pennsylvania law by which the bank is incorporated.

We thus clear the case of some difficulty by arriving at this point, the admission on both sides that there are certain powers which the bank can exercise within the State of Alabama, and certain others which it cannot exercise.

The question is, then, whether the bank can exercise, within the State of Alabama, this very power of buying a bill of exchange.

Our proposition is, that she can buy a bill of exchange within the State of Alabama; because there are no corporate functions necessary to the act of buying of a bill of exchange; because buying and selling exchange is a thing open to all the world, in Alabama as well as every where else; because, although the power to buy and sell bills of exchange be conferred upon this bank by its charter, and it could not buy or sell a bill of exchange without that provision in its charter, yet this power was conferred upon it, as were other powers conferred by its charter, to place the bank upon the same footing as an individual to give it, not a monopoly, not an exclusive privilege, in this respect, but simply the same power which the members of the corporation, as individuals, have an unquestionable right to exercise. The banker, the broker, the merchant, the manufacturer, all buy bills of exchange as individuals: the individuals who compose a corporation may do it; and we say that they may do it, though they do it in the name of, and for, the corporation. We say, undoubtedly, that they cannot acquire power, under the Pennsylvania charter, to do acts in Alabama. which they cannot do as individuals; but we say that the corporation may do, in their corporate character, in Alabama, all such acts, authorized by their charter, as the members thereof would have a right to perform as individuals.

The learned counsel on the other side was certainly not disposed to concede, gratuitously, any thing in this case. Yet he did admit that there might be a case in which the acts of a corporation, created by one State, if done in another State, would be valid. He supposed the case of a railroad company in one State sending an

agent into another State to buy iron for the construction of the road. Without conceding expressly the point of law in that case, he admitted that it would be a case very different from the present; and he gave as a reason for this admission, that it would be a single special act, necessary to enable the corporation to execute its functions within the State to which it belonged, and in this respect differing from the case now under consideration. In what circumstance, it may well be asked, do the cases differ? One act only of the corporation of the Bank of the United States is set forth in this record, and that act stands singly, and by itself. There is no proof before the court that the corporation ever bought another bill of exchange than that which is the subject of this suit. Transactions of this nature must necessarily come one by one before this court, when they come at all, and must stand or fall on their individual merits, and not upon the supposition of any policy which would recognize the legality of a single act, and deny the validity of the dealings, or transactions, generally, of which that act is a part.

Then, as to the other reason stated by my learned friend in support of the idea that such a purchase of iron might be supported, he says it is because that, in that case, the purchase, being made abroad solely to enable the corporation to perform its functions at home, might be considered legal, under the law of comity from one State to another.

Now, (said Mr. Webster,) that supposed case is precisely the case before the court. Here is the case of a corporation established in Philadelphia, one of whose lawful functions is to deal in exchange. A Philadelphia merchant, having complied with the order of his correspondent in Alabama, draws a bill upon him for the amount due in consequence, goes to the Bank of the United States, and sells the bill. The funds thus realized by the bank from the purchase of bills of exchange accumulate in Alabama. How are those funds to be brought back by the Philadelphia corporation within its control? The bank has unquestioned power to deal in bills of exchange. Can there be such a thing as dealing in exchange, with a power to act only on one end of the line? Certainly not. How, then, is the bank in Philadelphia to get its funds back from Alabama? Suppose that it were to send an agent there, and buy specie. Can the bank ship the specie? Can it sign an agreement for the freight, insurance, and charges of bringing it round? To do that would be an act of commerce, of navigation, -not of exchange. A power conferred upon a bank to deal in exchange would be perfectly nugatory, unless accompanied by a power also to direct its funds to be remitted. The practical result of a contrary construction would be, that this Pennsylvania bank may carry on exchange between Philadelphia and Reading, or

Philadelphia and Lancaster, but not by possibility with Mobile, or any other city or place in the South, or even with New York, Trenton, or Baltimore. Out of Pennsylvania it could only buy and remit. It could get no return. An exchange that runs but one way! What sort of an exchange is that?

[Having cleared the case of some of these generalities, Mr. Webster proceeded to the exposition of what he considered a constitutional, American view of the question.]

The record of this case finds that these plaintiffs, the members of the corporation of the Bank of the United States, are citizens of other States, and that the defendant is a citizen of Alabama. Now, in the first place, (to begin with the beginning of this part of the question,) what are the relations which the individual citizens of one State bear to the individual citizens of any other State of this Union?

How did the matter stand before the Revolution? When these States were colonies, what was the relation between the inhabitants of the different colonies? Certainly it was not that of aliens. They were not, indeed, all citizens of the sarne colony; but certainly they were fellow-subjects, and owed a common allegiance; and it was not competent for the legislative power to say that the citizens of any one of the colonies should be alien to the others. This was the state of the case until the 4th of July, 1776, when this common allegiance was thrown off. After a short interval of two years, after the renunciation of that allegiance, the articles of confederation were adopted; and now let us see what was the relation between the citizens of the different States by the Articles of Confederation. The Government had become a confederation. But it was something more, much more. It was not merely an alliance between distinct governments for the common defence and general welfare, but it recognized and confirmed a community of interest, of character, and of privileges, between the citizens of the several States.

"The better to secure and perpetuate mutual friendship and intercourse among the people of the different States in this Union," said the 4th of the Articles of Confederation," the free inhabitants of each of these States shall be entitled to all the privileges and immunities of free citizens in the several States; and the people of each State shall have free ingress and egress to and from any other State, and shall enjoy therein all the privileges of trade and commerce," &c. This placed the inhabitants of each State on equal ground as to the rights and privileges which they might exercise in every other State. So things stood at the adoption of the Constitution of the United States. The article of the present Constitution, in fewer words and more general and comprehensive terms, confirms this community of rights and privileges in the following form:"The citizens of each State shall be entitled to all the

privileges and immunities of citizens in the several States." However obvious and general this provision may be, it will be found to have some particular application to the case now before the court; the article in the Confederation serving as the expounder of this article in the Constitution.

That this article in the Constitution does not confer on the citizens of each State political rights in every other State, is admitted. A citizen of Pennsylvania cannot go into Virginia and vote at an election in that State; though, when he has acquired a residence in Virginia, and is otherwise qualified, as required by her Constitution, he becomes, without formal adoption as a citizen of Virginia, a citizen of that State politically. But, for the purposes of trade, commerce, buying and selling, it is evidently not in the power of any State to impose any hinderance or embarrassment, or lay any excise, toll, duty, or exclusion, upon citizens of other States, to place them, coming there, upon a different footing from her own citizens.

There is one provision, then, in the Constitution, by which citizens of one State may trade in another without hinderance or embarrass

ment.

There is another provision of the Constitution by which citizens of one State are entitled to sue citizens of any other State in the courts of the United States.

This is a very plain and clear right under the Constitution; but it is not more clear than the preceding.

Here, then, are two distinct constitutional provisions conferring power upon citizens of Pennsylvania and every other State, as to what they may do in Alabama or any other State: citizens of other States may trade in Alabama in whatsoever is lawful to citizens of Alabama; and if, in the course of their dealings, they have claims on citizens of Alabama, they may sue in Alabama in the courts of the United States. This is American, constitutional law, independent of all comity whatever.

By the decisions of this court, it has been settled that this right to sue is a right which may be exercised in the name of a corporation. Here is one of their rights, then, which may be exercised in Alabama by citizens of another State in the name of a corporation. If citizens of Pennsylvania can exercise in Alabama the right to sue, in the name of a corporation, what hinders them from exercising in the same manner this other constitutional right, the right to trade? If it be the established right of persons in Pennsylvania to sue in Alabama in the name of a corporation, why may they not do any other lawful act in the name of a corporation? If no reason to the contrary can be given, then the law in the one case is the law also in the other case.

My learned friend says, indeed, that suing and making a contract are different things. True; but this argument, so far as it has any